Aussie retailers missing out as shoppers return to bricks and mortar

According to Monash University research, retailers’ in-store experience is increasingly important.

Tristan Colangelo

New research shows that Australian shoppers are moving back to traditional bricks-and-mortar stores over online, but retailers are failing to capitalise on this resurgence.

In a quarterly survey of Australian shoppers, Monash Business School’s Australian Consumer, Retail and Services (ACRS) research unit found 65% of shoppers prefer using bricks-and-mortar stores most of the time, compared to 18% of Australians preferring to shop online.

Dr Rebecca Dare, Managing Director of the ACRS research unit within Monash Business School’s Department of Marketing, said the shift indicates a return to the importance of customer experience at physical stores.

“Human touches and the sensory experiences of a store visit is increasingly important, particularly with millennials – who prefer to spend more money on experiences than on material things” she said.

“Shoppers miss the customer experience of physical stores; ‘real life’ connection with other people, touching things and trying them on is not an experience you get online.”

Offshore retailers winning on customer experience

The current trends show Australians are shopping more frequently in 2018 than they were in 2016, but bucking the general theories, ACRS research shows that Australian shoppers are increasingly drawn to physical stores, not online channels, to make non-grocery purchases.

Dr Dare says similar trends are occuring overseas. "Nearly 80% of shoppers in the USA purchased more than half of their items in-store in 2017.” she said.

Despite this, says Dr Dare, Australian retailers are not maximising their in-store experience.

“We see trends overseas with empathic, human-centred design and advanced technologies that make shopping easier and/or more pleasurable, however in Australia it’s all too common to see that in some cases the basics aren’t right - stock is piled high to the ceiling, merchandise is displayed poorly, and finding personalised customer service can be difficult,” she said. "Australian retailers need to understand that customers want the experience that the physical store can bring. Retailers just need to provide it."

Dr Dare said there are numerous best practice examples of overseas brands and physical stores winning on customer experience.

IKEA in the UK are discounting umbrellas on rainy days which communicates a human understanding, while providing a solution to an everyday problem. Also, Nike in the USA is using technology-enabled personalisation through the Nike Maker’s Experience, which allows shoppers to design their own custom shoes in-store.

Dr Dare said that such notable examples are sparse in the Australian retail landscape and Australian retailers need to become better equipped to take advantage of the shift back to bricks-and-mortar.